Business Segments

During the fourth quarter of 2015, the composition of the Company's reportable segments was revised to reflect the realignment of its business model in the Americas, which includes MUAH. The realignment consolidated the customer base of the Commercial Banking operating segment, including its products and services, into the activities performed within various other segments. The Company now has four reportable segments: Regional Bank, U.S. Wholesale Banking, Transaction Banking, and Investment Banking & Markets. Prior period segment results have been revised to conform to the current period presentation. Below is a detailed description of these reportable segments.

Regional Bank

The Regional Bank offers a range of banking products and services to individuals, including high net worth individuals and institutional clients, and businesses generally with up to $500 million in annual revenue, delivered generally through a network of branches, private banking offices, ATMs, broker mortgage referrals, relationship managers, telephone services, and web-based and mobile banking applications. These products and services include mortgages, home equity lines of credit, consumer and commercial loans, deposit accounts, financial planning and investments. The Regional Bank also provides a broad spectrum of commercial credit products including commercial loans, accounts receivable, inventory, and trade financing to corporate customers generally on the U.S. West Coast, and commercial real estate financing nationwide. The Regional Bank is comprised of five main divisions: Residential Lending, Retail Banking, Wealth Markets, Commercial Banking and Real Estate Industries.

The Residential Lending Division provides the centralized origination, underwriting, processing, servicing, collection and administration for consumer assets including residential mortgages.

The Retail Banking Division serves its customers through Private Banking, which provides comprehensive relationship management to clients with up to $3 million in deposits and investment balances at MUB; 327 full-service branches in California and 26 full-service branches in Washington and Oregon, as well as through ATMs, call centers, web-based and mobile internet banking applications and through alliances with other financial institutions. Retail Banking provides checking and deposit products and services; bill and loan payment, merchant, various types of financing and investment services; and products including credit cards.

The Wealth Markets Division serves its customers through Private Wealth Management, which provides comprehensive relationship management to clients with over $3 million in deposits and investment balances at MUB; UnionBanc Investment Services LLC, a subsidiary of MUB and a registered broker-dealer and investment advisor; and Asset Management, which includes Highmark Capital Management, Inc., a subsidiary of MUB and a registered investment advisor. Wealth Markets provides investment management and advisory services to institutional clients, wealth planning, deposits and risk management strategies, trust and estate administration, as well as investment sub-advisory services to unaffiliated funds. Products provided to its customers include traditional brokerage, managed accounts, annuities, mutual funds, fixed income products and insurance and customized lending.

The Commercial Banking Division provides a broad spectrum of commercial credit products including commercial loans, accounts receivable, inventory, and trade financing primarily to corporate customers with annual revenues up to $500 million based on the U.S. West Coast. Commercial Banking offers its customers a range of noncredit services and products, which include global treasury management and capital markets solutions, foreign exchange and various interest rate risk and commodity risk management products through cooperation with other segments.

The Real Estate Industries Division serves professional real estate investors and developers. Real Estate Industries, through its Community Development Finance unit, makes tax credit investments in affordable housing projects, as well as construction and permanent financing.

U.S. Wholesale Banking

U.S. Wholesale Banking provides commercial lending products, including commercial loans, lines of credit and project financing, to corporate customers with revenue greater than $500 million. The segment employs an industry-focused strategy including dedicated coverage teams in General Industries, Power and Utilities, Oil and Gas, Telecom and Media, Technology, Healthcare and Nonprofit, Public Finance, and Financial Institutions (predominantly Insurance and Asset Managers). By working with the Company's other segments, U.S. Wholesale Banking offers its customers a range of noncredit services, which include global treasury management, capital market solutions, and various foreign exchange, interest rate risk and commodity risk management products.

Transaction Banking

Transaction Banking works alongside the Company's other segments to provide working capital management and asset servicing solutions, including deposits and treasury management, trade finance, and institutional trust and custody, to the Company's customers. The client base consists of financial institutions, corporations, government agencies, insurance companies, mutual funds, investment managers and non-profit organizations.

Investment Banking & Markets

Investment Banking & Markets, which includes Global Capital Markets of the Americas, works with the Company's other segments to provide customers structured credit services, including project finance, leasing and equipment finance, commercial finance, funds finance and securitizations. Investment Banking & Markets also provides capital markets solutions, including syndicated loans, equity and debt underwriting, tax equity and merchant banking investments; risk management solutions, including foreign exchange, interest rate and energy risk management solutions; and facilitates merchant and investment banking-related transactions.

Other

The Company generally applies a "market view" perspective in measuring the business segments. The market view is a measurement of customer markets aggregated to show all revenues generated and expenses incurred from all products and services sold to those customers regardless of where product areas organizationally report. Therefore, revenues and expenses are included in both the business segment that provides the service and the business segment that manages the customer relationship. The duplicative results from this internal management accounting view are eliminated in "Other."

"Other" includes the Asian Corporate Banking segment and Corporate Treasury. The Asian Corporate Banking segment offers a range of credit, deposit, and investment management products and services to companies located primarily in the U.S. that are affiliated with companies headquartered in Japan and other Asian countries. Corporate Treasury is responsible for ALM, wholesale funding and the ALM investment and derivatives hedging portfolios. These treasury management activities are carried out to manage the net interest rate and liquidity risks of the Company's balance sheet and to manage those risks within the guidelines established by ALCO. For additional discussion regarding these risk management activities, see Part I, Item 3. “Quantitative and Qualitative Disclosures About Market Risk” in this Form 10-Q.

Additionally, "Other" is comprised of certain corporate activities of the Company; the net impact of funds transfer pricing charges and credits allocated to the reportable segments; the residual costs of support groups; fees from affiliates and noninterest expenses associated with BTMU's U.S. branch banking operations; the unallocated allowance; goodwill, intangible assets, and the related amortization/accretion associated with the Company's privatization transaction; the elimination of the fully taxable-equivalent basis amount; the difference between the marginal tax rate and the consolidated effective tax rate; and the FDIC covered assets.

The information, set forth in the tables that follow, is prepared using various management accounting methodologies to measure the performance of the individual segments. Unlike GAAP there is no standardized or authoritative guidance for management accounting. Consequently, reported results are not necessarily comparable with those presented by other companies and they are not necessarily indicative of the results that would be reported by the business units if they were unique economic entities. The management reporting accounting methodologies, which are enhanced from time to time, measure segment profitability by assigning balance sheet and statements of income items to each operating segment. Methodologies that are applied to the measurement of segment profitability include a funds transfer pricing system, an activity-based costing methodology, other indirect costs and a methodology to allocate the provision for credit losses. The funds transfer pricing system assigns a cost of funds or a credit for funds to assets or liabilities based on their type, maturity or repricing characteristics between Corporate Treasury and the operating segments. A segment receives a funding credit from Corporate Treasury for its liabilities. Conversely, a segment is assigned a charge by Corporate Treasury to fund its assets. Certain indirect costs, such as operations and technology expense, are allocated to the segments based on an activity-based costing methodology. Other indirect costs, such as corporate overhead, are allocated to the segments based on internal surveys and metrics that serve as proxies for estimated usage. During the normal course of business, the Company occasionally changes or updates its management accounting methodologies or organizational structure. During the fourth quarter of 2015, the Company revised its management reporting accounting methodology to exclude the impact of the business integration initiative from the measurement of segment profitability. Fees from affiliates and noninterest expenses associated with BTMU's U.S. branch banking operations are now included within "Other." Beginning with the second quarter of 2016, the Company revised its methodology for allocating certain indirect costs to the segments. Prior period results have been updated to reflect these changes in methodology.



As of and for the Three Months Ended June 30, 2016:
(Dollars in millions)	Regional Bank			U.S. Wholesale Banking			Transaction Banking			Investment Banking & Markets		Other			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	478		$	114		$	120		$	60	$	(52	)	$	720
Noninterest income (expense)	112			38			44			65		207			466
Total revenue	590			152			164			125		155			1,186
Noninterest expense	420			49			109			42		190			810
(Reversal of) provision for credit losses	(5		)	(28		)	(3		)	2		(3		)	(37		)
Income (loss) before income taxes and including noncontrolling interests	175			131			58			81		(32		)	413
Income tax expense (benefit)	51			52			23			12		(19		)	119
Net income (loss) including noncontrolling interests	124			79			35			69		(13		)	294
Deduct: net loss from noncontrolling interests	—			—			—			—		11			11
Net income (loss) attributable to MUAH	$	124		$	79		$	35		$	69	$	(2	)	$	305

Total assets, end of period	$	63,467		$	14,392		$	1,838		$	11,762	$	25,697		$	117,156



As of and for the Three Months Ended June 30, 2015:
(Dollars in millions)	Regional Bank		U.S. Wholesale Banking		Transaction Banking		Investment Banking & Markets			Other			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	473	$	106	$	111	$	62		$	(33	)	$	719
Noninterest income (expense)	106		41		42		60			136			385
Total revenue	579		147		153		122			103			1,104
Noninterest expense	467		48		108		43			177			843
(Reversal of) provision for credit losses	6		12		—		(12		)	9			15
Income (loss) before income taxes and including noncontrolling interests	106		87		45		91			(83		)	246
Income tax expense (benefit)	26		35		18		23			(31		)	71
Net income (loss) including noncontrolling interests	80		52		27		68			(52		)	175
Deduct: net loss from noncontrolling interests	—		—		—		—			6			6
Net income (loss) attributable to MUAH	$	80	$	52	$	27	$	68		$	(46	)	$	181

Total assets, end of period	$	61,468	$	13,293	$	1,779	$	11,277		$	26,449		$	114,266



As of and for the Six Months Ended June 30, 2016:
(Dollars in millions)	Regional Bank			U.S. Wholesale Banking		Transaction Banking			Investment Banking & Markets			Other			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	959		$	223	$	241		$	119		$	(125	)	$	1,417
Noninterest income (expense)	226			66		91			90			388			861
Total revenue	1,185			289		332			209			263			2,278
Noninterest expense	856			98		229			83			420			1,686
(Reversal of) provision for loan losses	(6		)	102		(1		)	32			(2		)	125
Income (loss) before income taxes and including noncontrolling interests	335			89		104			94			(155		)	467
Income tax expense (benefit)	97			35		41			(2		)	(35		)	136
Net income (loss) including noncontrolling interests	238			54		63			96			(120		)	331
Deduct: net loss from noncontrolling interests	—			—		—			—			23			23
Net income (loss) attributable to MUAH	$	238		$	54	$	63		$	96		$	(97	)	$	354

Total assets, end of period	$	63,467		$	14,392	$	1,838		$	11,762		$	25,697		$	117,156



As of and for the Six Months Ended June 30, 2015:
(Dollars in millions)	Regional Bank		U.S. Wholesale Banking		Transaction Banking		Investment Banking & Markets			Other			MUFG Americas Holdings Corporation
Results of operations - Market View
Net interest income (expense)	$	951	$	207	$	227	$	122		$	(105	)	$	1,402
Noninterest income (expense)	217		73		85		91			254			720
Total revenue	1,168		280		312		213			149			2,122
Noninterest expense	928		100		210		77			377			1,692
(Reversal of) provision for loan losses	12		15		1		(19		)	9			18
Income (loss) before income taxes and including noncontrolling interests	228		165		101		155			(237		)	412
Income tax expense (benefit)	45		63		39		35			(77		)	105
Net income (loss) including noncontrolling interests	183		102		62		120			(160		)	307
Deduct: net loss from noncontrolling interests	—		—		—		—			11			11
Net income (loss) attributable to MUAH	$	183	$	102	$	62	$	120		$	(149	)	$	318

Total assets, end of period	$	61,468	$	13,293	$	1,779	$	11,277		$	26,449		$	114,266